More than one million young people aren't in employment, education or training, and too many are losing hope.
I gave a speech at the Social Mobility Commission setting out why this happened, why Government policy has made matters worse and what we should do differently. Read it below:
Good morning everyone.
It’s a pleasure to follow Angela.
From teenage mum to deputy prime minister. This is not a well-trodden path. She deserves all our respect.
I came here through a more conventional route – via university and a business career - although it wasn’t always an easy one either.
But when Angela was a teenager grappling with a baby, I was doing what many of you will have done in your teens – picking up holiday jobs to fund nights out with friends.
Those were formative in their own way.
Waitressing in a pub where the chef often failed to turn up, so we had to microwave ready meals.
Answering the phone in a marketing agency in a sing-song voice – which I did so badly I was fired.
Cleaning toilets on a boat. The less said about that the better.
But it was cash in my wallet – and I have no doubt I learnt a lot in the process.
There are now one million young people not in employment, education or training.
One million.
Birmingham has a population of around a million (a bit more)
Imagine, everyone in Birmingham, all aged 16 to 24 - and doing nothing.
And there are over 700,000 young people unemployed.
Looking for work, but unable to find it.
Go back 25 years, and nearly two-thirds of young people were in work.
Today it is barely half.
I could give you more stats – but I’d rather talk about some of the people behind the numbers.
Two weeks ago, I hosted ten young people in Parliament to talk about their experiences looking for work.
One of them was a young woman called Aryn.
Aryn has done five years of physician associate training.
She has submitted hundreds of job applications – for healthcare roles, but also for retail and hospitality.
She is articulate, capable and determined.
At the moment, she works part-time in domiciliary care because, in her words, “I don’t want to go onto welfare.”
She did everything right. She studied. She passed exams. She is qualified, motivated, and keen to work.
And she still cannot find a job that reflects what she has to offer.
But that is only part of the picture.
I also want to tell you about Daniel.
Daniel's mum is a constituent of mine. He was sixteen when the pandemic hit.
He stopped going to school during lockdown and never really went back.
He is on the autistic spectrum.
Not severely, but enough that social situations can be more challenging for him than for many of us.
He’s on a bus route, but the bus only comes twice a day.
He had a job for a bit, but he gave it up.
Now he spends most of his time in his room.
His mum doesn’t know what to do. His Dad doesn’t feature in his life.
Daniel is not a bad lad:
He is a young man for whom the one thing that provided structure in a household that otherwise lacked it – going to school - fell away at a crucial moment.
No qualifications, neurodiversity, poor transport links… there are a lot of things that make it hard for him to get out the rut he’s got stuck in.
Daniel's challenge is very different from Aryn's.
Eighteen months ago, when I spoke about youth unemployment and NEETs,
the discussion was generally about people like Daniel.
We might call them the Covid Generation.
But now we’re talking about a second, different problem.
It’s not just Daniel who’s out of work.
It’s also people like Aryn – young people with qualifications, motivation – and work experience too.
One thing Aryn said sticks in my mind: “It’s so hard to have hope.”
For both the Aryn’s and Daniel’s of this world that is now the reality.
How did we get here?
There are two sides to this story too.
I will start with the demand side – the demand for these young people from employers.
Because employment depends on two things: someone willing to take a job, and someone willing to offer one.
This part of the equation hasn’t received much attention in recent years.
Not least because there have been plenty of vacancies.
But over the last two decades, Britain has lost around 1.6 million lower and middle-skilled jobs.
Technology has automated checkouts, warehouses and back offices.
Whole industries have shifted offshore.
The economy has changed.
That means fewer opportunities to get your foot on the first rung of the ladder, especially for young people without qualifications.
Meanwhile, there’s been an increase of 6.3 million high-skilled jobs in the same period – but right now the number of graduate jobs is shrinking.
In 2025 there were a third fewer graduate positions advertised than in 2024.
Then on the other side, let’s talk about the supply of young people to fill the jobs that there are.
With the shift away from lower skilled jobs, we’ve encouraged more people to go to university.
But we haven’t trained enough people to do all manner of trades.
And we’ve created a generation of graduates without enough graduate jobs to absorb them.
Many with horrible levels of debt and degrees with questionable value.
Now we have 700,000 graduates on out of work benefits - 14% of graduates are unemployed -
– while many more are experiencing the disappointment of doing jobs which fall far short of their qualifications.
Employers say education hasn’t prepared young people for work – and nor have Saturday jobs, because those are few and far between.
Throw in the challenges of geography – parts of the country with fewer jobs, or poor public transport.
And while for me, moving for work went without question, if you’ve got to care for someone in your family, or you can’t see a way to afford to move – or perhaps you’re hoping you’ll get social housing in your area, then moving isn’t on your agenda.
Then there is mental health.
I don’t doubt the young people I speak to about their struggles with anxiety and with neurodiversity.
But the number of young people claiming sickness benefits has more than doubled in the last five years – with the steepest rise occurring in claims for mental health and behavioural conditions (but not in serious mental illness categories).
And though some are working many are not.
Even though work is usually better for mental health.
And the longer you are off work the less likely you are to go back.
All this has played out over the last couple of decades.
But there is a shorter-term story too – one of deliberate political choices made by the Government since 2024.
The rise in national insurance – and the equalisation of the minimum wage - has increased the cost of employing young people.
More employment regulation means businesses are more cautious about taking on someone without experience.
Higher employment costs, more red tape - that has consequences.
Saturday jobs. Weekend shifts. Junior roles.
Going – or gone.
The first rung on the ladder – missing.
And without the first rung, there is no ladder.
This is not because of technology: it’s because of decisions made in Downing Street.
I speak to a lot of businesses in this job.
I have lost count of how many have told me that they have stopped hiring young people.
They can’t afford it.
They can’t risk it.
This didn’t have to happen.
This Government tells you they care about young people – but action speaks louder than words
And their actions are destroying the lives of this generation.
Kier Starmer said on Monday his proudest moment was when he became Prime Minister.
Does he now feel the equivalent sense of shame – for what he’s done?
For the young people left high and dry?
He talked about growth – but in practice he killed it.
300,000 jobs have disappeared on his watch.
100,000 more young people are unemployed.
This is his legacy.
Let’s hope Andy does better – for their sake.
He should look at some other countries – because we stand out here in the UK – and not in a good way.
Other countries are facing the same technological shifts, the same global pressures – but doing significantly better than we are.
Take the Netherlands and Denmark.
Their youth unemployment is materially lower than in Britain.
Around 9% and 13% respectively, compared to over 16% here.
They have made different choices.
They have a well-established vocational track through secondary education.
Their schools have work-study pathways and sustained partnerships with employers.
More young people leave education with skills that businesses want.
And they have welfare systems with clear expectations built in: support is available, but it comes with obligations to move towards work.
Or look at Japan.
Which I know is a very different culture and economy to ours.
But facing the same wave of artificial intelligence and automation that is reshaping our economy,
Japan made a deliberate decision: to see it as an opportunity, not a threat.
To invest in reskilling.
Businesses there are maintaining levels of graduate recruitment – seeing AI as an opportunity to grow as well as increase productivity.
They still have their problems – skills mismatches and so on – but their youth unemployment rate is under 4% and falling.
What have we done instead?
We’ve tried to establish respected vocational options but frankly we haven’t nailed it.
We established standards for apprenticeships to give them similar credibility and consistency to degrees – resulting in many becoming highly competitive.
But there haven’t been enough of them, some sectors haven’t fitted the model - nor have many small businesses.
We now have huge workforce gaps in sectors like manufacturing - 95,000 vacancies right now.
And we’ve seen the demise of the traditional tradesman-plus-a-lad apprenticeship model, which for centuries has passed skills on from one generation to the next.
At school, vocational T-levels are popular but not widely available.
UTCs are great but few and far between.
The fact is: vocational routes are not mainstream in our education system.
The DWP has run and commissioned many programmes to address skills gaps in the workforce.
But still, when we faced labour shortages after the pandemic - in social care, in hospitality, in logistics, we went for an instant-fix solution.
Migrant workers.
Hot on the heels of waves of immigration when we were in the European Union.
Rather than doing the hard work of getting British people to do those jobs
- we allowed migrant workers to come to the UK and do them instead.
This was the wrong answer.
Now, with business confidence in the doldrums and the AI revolution upon us, we are seeing a decline in graduate jobs.
In the face of economic headwinds many British businesses are using AI to cut costs and preserve margins – rather than as a springboard for growth.
The consequence of all of this, is that we now have more people competing for fewer jobs.
And we have a generation of young people paying the price.
And the price is enormous.
Start with the young people themselves.
We know - from the financial crash generation - that the scars of early unemployment run deep and last long.
Lower wages. Slower careers. Poorer health.
We risk the same for this generation.
Then there is the cost to the country.
Billions paid out in benefits.
£3 billion in tax revenues forgone.
£38 billion in lost economic output.
This is not just a social priority. It is a fiscal one.
And it is getting worse.
Every month of delay is another cohort of young people drifting further from the labour market.
There is no time to waste.
So, what is the Government doing about it?
They have various work programmes.
Fine – so did we.
They are doing more, they will tell you.
They are actually paying businesses to provide jobs.
But the fact is, you don’t fix unemployment with Government funded jobs.
Nor do you fix unemployment by taxing jobs.
Even they know what they’re doing isn’t the answer.
That’s why they commissioned Alan Milburn and got two hundred pages of diagnosis.
But no answers.
His report contains a wealth of evidence.
I am sure many of you in this room have read it.
But if I am honest, I do not think our biggest problem is a lack of reports.
Or a lack of statistics.
Or a lack of analysis.
It is a lack of action equal to the scale of the problem.
So let me tell you where I think the answers actually lie.
The first and most important thing is jobs.
We need more jobs.
Jobs that young people can actually get.
That means making it cheaper and easier for businesses to hire.
We must cut the tax burden and roll back the employment red tape.
What’s the good of gold-plated rights for workers if you can’t even get work?
Government cannot create jobs.
But it can get out of the way of the businesses that do.
We need to back businesses to invest and expand.
We need to appreciate the nation’s entrepreneurs, risk takers and wealth creators –
- and inspire this generation of young people to become the next generation of brilliant business people
- the next founder of DeepMind or Apple or Uber.
And we need to embrace technology.
In the age of artificial intelligence there will be winners and losers.
We need to be a winner.
Then, as businesses grow and start recruiting
we need British young people to fill the jobs.
not migrant workers.
So let’s make sure our young people have the skills they’ll need to do those jobs.
The means to get to wherever they are.
The resilience to get through the bad days.
And the certainty that they’ll be better off if they do.
That means making sure that work always pays better than benefits.
Which is why we must be prepared to reform welfare.
No more being parked on UC-health and PIP for mental health.
Get help and get out there.
We need to make sure our education system does equip young people with the skills needed in the modern world of work, and the ability to cope with the uncertainty of the time we’re living in.
In fact – not just to cope – but to thrive.
In a time of rapid technological change, this should be their moment.
And we need to look at the part we’re expecting the state to play.
Sometimes Government can help but let’s be realistic: it’s often the wrong answer.
The things I see working are when people and organisations outside Government seize the initiative.
Let’s be honest about the limits of the state –
Sometimes what it most needs to do is get out of the way.
Get off the backs of the organisations at the coal face.
Stop pushing people into the dead-end of dependency.
Let’s raise our expectations of what young people can do.
Give them the chance to take control of their destinies
And first and foremost - make sure the jobs are there for them.
Because a job is more than a pay packet at the end of the month.
It’s a chance to become someone… to build something…to make something of your life
The difference between living off others
And paying your own way.
The chance to buy a home, provide a family – and dare I say it when we’re talking about young people – a comfortable retirement.
But without that first job – none of that is possible.
A lost generation before they even get the chance to start.
The job of opposition is not just to oppose.
It’s also to come up with an alternative to whatever the Government is doing or not doing.
Your plan.
That’s why I’m working on our plan for young people and work.
A plan for more jobs for young people.
A plan to make sure young people have the skills to do those jobs.
A plan to bridge the gap between the young person stuck at home and the daunting world of work.
A plan to make sure work pays better than welfare.
A plan to back the next generation to get ahead, to shift the prospects of young men and women like Daniel.
And give young men and women like Aryn the chance to make the most of the skills they have worked so hard to gain.
For them and for the future of our country.
A plan to give us all hope.
You can watch my speech in full here.
